The residential property market across the Southern Suburbs, stretching from Woodstock to Tokai and incorporating predominantly the suburbs that lie above the M5 motorway, generated over R8.4bn in sales last year.
“That”, says James Lewis, Seeff’s managing director for the area, “equates to about 40% of the total value of property transactions recorded for the Cape metro last year”.
Despite a slower market overall, Lewis says that the area remains very active, both in terms of sales and rentals with some neighbourhoods remaining busier than in the preceding few years.
The area encompasses about 31 smaller suburbs with Constantia the largest with the highest number of households, followed by Claremont, Rondebosch and Kenilworth.
Some 2948 transactions worth over R8.4bn (R8 430 292 000), were recorded for 2016 at an average selling price of R2.86m, the highest on record. This constitutes about 40% of the total value generated for the Cape metro for the year.
“That means that about eight property sales were concluded on average each day across the area”, says Lewis. “Well-priced properties below the R8m-R10m price range are still selling within 4-6 weeks, the lower end of the price scale obviously selling much faster while the upper end takes a bit longer”.
An analysis of Lightstone data reveals that the market peaked in 2014 with 3415 transactions worth R8 459 726 000 and an average selling price of R2.447m. For the 2015 year, it dipped slightly by 3% to 3312 transactions while the overall value generated increased by 9% to R9 197 956 000. The selling price rose by 12% year-on-year to R2.78m.
In 2016, the market contracted by 12% in unit terms and 9% in overall value. The average selling price however, was up slightly by 3%, rising to R2.86m.
Propstats data shows that a number of R20m-plus sales were recorded across the area, ranging to a highest price of R42m in Bishopscourt (Upper Torquay Road, sold by Seeff). There were also a few top end transactions in Claremont Upper as well as in Constantia, ranging to R30m in Spillhaus Avenue and R33.226m in Bellevue Road.
Lewis says these figures illustrate a resilient market: “Bishopscourt for example generated sales of almost R400 million last year. According to agents, Debbie Chalmers and Paul Sale, Bishopscourt along with Claremont and Kenilworth Upper, will remain a major draw-card for upper income buyers and they expect a busy year”.
Rondebosch meanwhile generated sales of over R620m for 2016 and agent, Charmaine Scott-Wilson says 2017 is already off to a busy start with plenty of opportunities for sellers. “One of the most exciting transactions is the recent sale by the agent of a historic Sir Herbert Baker home on over 3000sqm of land, sold for R8.15m to a family who plan on restoring it”.
According to agents, Deidre Tracey and Teodora Aleksieva, Harfield Village enjoyed a particularly active year with over R100m in sales: “Any well priced property still sells within three weeks and the average selling price for the village is now around R2.3m”.
The rising prices in Harfield has boosted the demand for nearby Claremont Village with a steady flow of buyers now heading here according to the agents. That has resulted in sales activity continuing to rise, from 17 sales in 2013 to 21 last year. The average selling price rose by about 41%, from R837 000 to R1 183 000 over the same period.
Newlands too continues to perform well according to agents, Barbara van der Westhuyzen and Vanessa Clerke. Sales for 2016 surpassed the R600m mark with full title property now selling for around R6m on average and sectional title property for around R3.3m.
Private property data shows that about 28% of advertised stock is for rentals. The average rental rate for a two-bedroomed property is around R16 000/month, three bedrooms around R23 500/month and four bedrooms around R33 000/month on average.
According to rental agent, Marinda Bienz, a luxury five-bedroomed home in Bishopscourt now ranges from about R55 000/month to R100 000/month. Rentals have already been concluded at R65 000 to R75 000 per month and there is a top end listing at R110 000/month.
Agents, Sonya Garisch & Jacqui Bush note that Constantia rentals now range from R60 000 to R80 000 per month for a luxurious five bedroomed home. They note a gradual increase in demand due to overseas relocations compared to last year although rental rates at the top end have remained fairly flat.
“The highest demand for rental properties in the Newlands, Constantia and Tokai areas are in the R20 000 to R40 000/month range and investment buyers are sure to secure tenants within this mid-market bracket”, say the agents.
“This year, we have also noticed an influx of local tenants looking to rent before deciding on buying. The excellent schools, both government and private, being a key draw card. They also expect a spike in demand from mid-year ahead of the start of the International School year”.